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Sector Update: Consumer

By: MT Newswires
Posted: 9/11/2013 2:27:00 PM
Referenced Stocks: RH

Consumer stocks are higher, with shares of consumer staple companies in the S&P 500 climbing about 0.5% while shares of consumer discretionary stocks in the S&P are ahead 0.5%.

In company news, Restoration Hardware Holdings Inc. ( RH ) is down 8.5% at $69.57 a share, holding just above its session low despite the specialty retailer's late Tuesday reporting adjusted Q2 earnings and revenue that beat analyst forecasts and issuing upside guidance for the current quarter and FY14.

RH said it earned $0.49 per share in Q2, excluding one-time items, up from a $0.33 gain last year and topping analyst forecasts by $0.06 per share, according to Capital IQ. Net revenue increased 30% year over year to $382.1 million, also beating analyst estimates.

Perhaps the one fly in the ointment as far as investors were concerned was RH's reporting a GAAP net loss of $0.46 per share in Q2.

The company raised its FY14 outlook, now forecasting adjusted EPS in a range of $1.65 to $1.70, breezing past Wall Street expectations for a $1.48 per share adjusted profit during the 12 months ending in January. Revenue is seen coming between $1.56 billion to $1.58 billion, topping the analyst consensus by at least $40 million.

RH also issued upside guidance for Q3, projecting adjusted earnings of $0.81 to $0.84 per share on between $490 million to $500 million in revenue. The Street is looking for a $0.16 per share gain on just $364.71 million in sales.

In other sector news,

(+) WEN, (+0.8%) Shares climb to 66-month high after Standard & Poor's Ratings Services says it won't change its credit ratings for the restaurant operator following its plans to increase the size of its credit facility

(-) CWTR (-22.6%) The apparel company reports a Q2 net loss of $0.72 per share, wider than Capital IQ estimates looking for a $0.63 per share loss.